Wednesday, April 6, 2011

Payday Loans – Are They Convenient For Financially Stressed Borrowers?

Payday loans have recently become an increasingly popular trend of borrowing money in the US. It is a loan of a small amount that meets the temporary financial needs of a borrower. For obtaining a payday loan, the borrower does not need to go into routine financial paperwork that is usually demanded by banks and financial institutions when getting a new loan. Such loans are made to assist the temporary financial crunch suffered by most debtors in the US. With the rise in the level of national debt in the US, more and more people are finding themselves drowning in unpaid financial obligations. Payday loans are a very convenient option for borrowers.

Here is a look at the factors that add to their convenience:
• Convenience of application: As most payday loan companies operate online, you can easily apply for a loan from your home. You need to take out time to go to a brick and mortar company that will help you pay off your debts through a payday loan. Such convenience of applications makes it so popular among US consumers who are going through a credit crunch for some temporary reason.
• Fast access to money: Usually, traditional loans take a definite time to process as it involves a time-taking process. You have to meet certain requirements for getting approved for a loan. Your credit score plays a most important role. But here, you will get access to cash within 24 hours from the time of application (next business morning). This will help you get cash for any financial emergency.
• Lenient requirements: Unlike traditional secured and unsecured loans, the requirements for getting qualified for a payday loan is not strict; instead it is extremely lenient. In case of a payday loan, you require a job, a bank account and must be over 18. Your collateral is your next paycheck. As soon as you fill out the form, you can get the money put into your bank account by the next business mornign.
• Short-term commitment: As you’re getting the payday loan against your next paycheck, you’ll be debt free within two weeks since you’ve taken the payday loan. Weather your house has burnt or you need to meet the costs of college for your child, you can easily utilize the proceeds of a payday loan. But make sure you repay your payday loans on time so that you’re not trapped in the vicious cycle of payday loan debt.
• No credit check required: The biggest convenience factor of payday loans is that there is no credit check involved in obtaining a payday loan. A borrower with a bad credit score can also get a loan. In case of traditional loans, the banks take a long time to process your application as they evaluate your entire financial history. With a payday loan, there is no such in depth check involved, making the process attainable for everyone.

The speed of the process of getting payday loans makes them a tempting financing option in the US. So, if you’re responsible enough then there are no downsides of taking out a payday loan.

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